CANADIAN DEFENSE COMPANY AND TWO EXECUTIVES INDICTED ON CHARGES TO DEFRAUD U.S. MILITARY IN IRAQ

On April 21, 2008, a federal grand jury in San Francisco, CA unsealed an indictment against a Canadian company, Newcon Optik Ltd. (“Newcon”), and two of its executives, Michael Beker (a.k.a. Mendel Beker) and Arie Prilik for their role in a scheme to defraud the U.S. military in Iraq.
Mr. Beker, president and CEO, Mr. Prilik, former senior vice president, along with the company itself are charged with two counts of wire fraud and one count of conspiracy to commit wire fraud. Mr. Beker and Newcon were charged separately for money laundering. The defense company and the two employees allegedly attempted to defraud the U.S. Army’s Tank-Automotive and Armaments Command (“TACOM”) by paying a competitor $50,000 to withdraw its supply of night vision goggles. The conspirators allegedly would then have supplied TACOM with their night vision goggles, by overcharging TACOM by approximately $11 million. TACOM is responsible for training and providing equipment to the Iraqi Army.

Mr. Beker and Mr. Prilik face 20 years of prison time for the wire fraud charges and up to five years in prison and a quarter million dollars in criminal fines if convicted on the conspiracy charge. Mr. Beker faces up to 20 years in prison and a criminal fine of $500,000 if convicted of the money laundering charge. Upon conviction, the U.S. government will seek a criminal forfeiture of the $50,000 payment.

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